Nevsun Upgrades Mineral Resources Estimates in Eritrea

bisha-harena
Nevsun has lifted the mineral resources estimates at its Bisha and Harena deposits in Eritrea. Measured and indicated resources at Bisha district now contains 959 million pounds of copper, 3.56 billion pounds of zinc, 840 thousand ounces of gold, and 46 million ounces of silver. This is without including the new massive sulphide mineralization at Asheli deposits.

By Nevsun Resources,

Nevsun Resources Ltd. (TSX:NSU / NYSE MKT:NSU) (“Nevsun” or the “Company”) is pleased to announce the updated mineral resource estimate effective December 31, 2015, for both the Bisha and Harena deposits. These updated resources form the first part of the annual year end mineral reserve and mineral resource statement for 2015. The updated mineral reserve estimate, currently in-progress, will be released in our Annual Information Form.

Highlights

  • Increased Bisha district inferred resources which now contain 426 million pounds copper, 1.16 billion pounds zinc, 531 thousand ounces gold, and 18 million ounces silver
  • Increased Bisha district measured and indicated resources which now contain 959 million pounds copper, 3.56 billion pounds zinc, 840 thousand ounces gold, and 46 million ounces silver
  • 15% increase to Harena primary indicated resources, now 3.7 million tonnes at 0.86% Cu, 3.1% Zn, 0.6 g/t Au and 27 g/t Ag
  • 69% increase to Harena primary inferred resources, now 10.9 million tonnes at 1.45% Cu, 4.0% Zn, 1.0g/t Au and 41 g/t Ag
  • Bisha and Harena remain open at depth with further drilling ongoing in 2016
  • Positive Bisha and Harena underground scoping study, more investment warranted

Cliff Davis, Nevsun CEO, commented,

“Our drilling at Harena continues to produce significant increases in the total resource available for the Bisha operation. We anticipate that further drilling will continue to grow the deposit at depth. Our exploration drilling was also successful in discovering new massive sulphide mineralization at Asheli, highlighting the prospectivity of the Bisha District to host additional resources.” Mr. Davis went on to say, “The underground scoping study demonstrated the potential to extend Bisha Main life by transitioning to underground mining in the future and the potential to provide additional feed to the Bisha mill from a Harena underground mine. In 2016, we will further assess these opportunities through additional investment.”

Resource growth due to 20,308 metres of new drilling at Harena was the most pronounced development. The new drilling also led to an improved understanding of the geology and mineral zonation used in the resource estimation process. Indicated resources at Harena grew by 480,000 tonnes or 15% from the previous year adding 12 million pounds of copper, 20 thousand ounces of gold and 560 thousand ounces of silver, offset by zinc indicated resources decreasing slightly by 10 million pounds.

Of most significance, the inferred resources at Harena increased by 4.5 million tonnes or 69% from the year earlier for an additional 186 million pounds of copper, 423 million pounds of zinc, 230 thousand ounces of gold and 6.47 million ounces of silver. In-situ metal grade estimates in the inferred resource category also improved as contained copper grew by 115%, zinc by 80%, gold by 177% and silver by 82%. Tables 1.1 to 1.5 contain the complete mineral resource estimates for each deposit.

At Bisha, a relatively modest 2,819 metres of drilling was completed in 2015. Despite the lower commodity prices used in 2015 as compared with 2014 for mineral resource calculations, the measured and indicated resource at Bisha remained essentially unchanged from the year previous while the inferred resource decreased slightly by 0.3 million tonnes. Year on year, the Bisha measured and indicated resources of contained zinc, gold and silver increased by 5%, 11% and 11%, respectively, helping to offset the 25% reduction in copper driven mainly by mine depletion of the supergene zone.

Life of Mine Optimization

In Q2 2015, Nevsun commissioned SRK Consulting (Canada) Inc. to prepare an internal conceptual study (internal scoping study) of the potential for underground mining at Bisha and Harena as well as to conduct a life-of-mine optimization study considering all Bisha regional resources.

As this optimisation study used inferred mineral resources, no mineral reserves have been estimated.

Bisha Underground

The scoping study indicated that underground mining at Bisha is highly plausible and that some of the material currently in the open pit mine plan may be more economic if extracted by underground bulk mining methods as compared with high strip ratio open pit cutbacks. An exploration drive would be required to further assess this opportunity with increased drilling to upgrade mineral resource classifications and further investigate geotechnical, hydrology and metallurgical rock characteristics. A decision to drive an exploration ramp most likely in H2 2017 will be made following further exploration drilling and metallurgical and geotechnical test work which will be conducted from within the Bisha pit during 2016.

The scoping study also confirms the correct decision last year to halt the cutback (Phase 9) of waste stripping for the Bisha open pit. If further work at Bisha main pit demonstrates that the upside potential is limited under the current economic and technical assumptions, waste stripping could be restarted with minimal disruption to the existing mine plan provided this happens over the next one to two years.

Harena Underground

For Harena, the underground mining scoping study used an interim mineral resource calculated mid-2015 which has since been superseded by the current larger resource in Table 1.3. The study showed a potentially mineable deposit with marginal economics that was sensitive to metal prices and metallurgical recoveries. Therefore, additional metallurgical drilling at Harena is planned during 2016 before making a decision to invest in an exploration decline which would be required to take the deposit through feasibility. An updated scoping study including this work is expected in early 2017.

The current economics for Hambok and Northwest were less encouraging during the scoping study assessment. Accordingly, in the current metal price environment no further investment is planned for Hambok or Northwest.